AMSTERDAM (AP) - The Netherlands' Supreme Court has upheld rulings that the now-defunct Belgian bank Fortis NV was mismanaged from September 2007 to September 2008, and its then-management board can be held accountable.
Friday's ruling opens the door for investor claims against former CEO Jean-Paul Votron, among others, though not former supervisory Chairman Count Maurice Lippens, whom lower courts found was too far removed from decision making to be held liable.
Fortis, Royal Bank of Scotland and Spain's Santander bought Dutch bank ABN Amro in a hostile takeover in 2007, nominally the largest in banking history.
Fortis agreed to buy ABN's Dutch operations for 24 billion euros in its part of the deal but was unable to finance the buy _ which represented around half of its own total size _ and eventually spiraled toward bankruptcy. The Dutch state ultimately nationalized all Fortis-ABN operations in the Netherlands in 2008 to avoid a meltdown of the country's financial system. The rescue has cost taxpayers at least 32 billion euros ($44 billion).
The court cited three specific grounds of mismanagement: its solvency plan for 2008, publishing incorrect information about the risks of its subprime mortgage portfolio ahead of a stock issue in 2007, and its public communication generally.
Friday's decision was hailed by the Dutch small shareholders' union, VEB, which hopes to recover some of their losses not only from the managers _ many of whom walked away with generous severance packages _ but also the consultants and bankers that advised Fortis.
"The confirmation of mismanagement by the Supreme Court gives a boost to the suit that the VEB is conducting for compensation of investors who suffered considerable losses" in Fortis's fall, the organization said in a reaction.
"It confirms that investors were misled and suffered damages as a result."
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